schindler foundation annual report and financial ......land (ubs pension fund barometer -3.45%)....

Schindler FoundationAnnual Report and Financial Statements as at December 31, 2018

Contents

11 Balance Sheet12 Operating Account14 Notes14 I Principles and Organization

16 II Active Insured and Pensioners

16 III How the Objective is Fulfilled

17 IV Valuation and Accounting Policies, Consistency

17 V Actuarial Risks / Risk Cover / Cover Ratio

19 VI Notes Pertaining to the Investments and the Net Investment Result

24 VII Notes Pertaining to Other Balance Sheet and Operating Account Items

24 VIII Conditions Imposed by the Supervisory Authority

24 IX Additional Information Regarding the Foundation’s Financial Position

24 X Events Following the Balance Sheet Date

25 Auditor’s Report

4 Overview of the 2018 Financial Year

4 | Schindler Foundation | Overview of the 2018 Financial Year

Overview of the 2018 Financial Year

1. The Schindler Foundation’s Financial PositionThe Foundation closed the 2018 financial year with surplus expenses (before the write- back of fluctuation reserves) of CHF 289,000 (2017: surplus expenses of CHF 414,000). The cover ratio declined marginally to 102.94%, from 103.09% the previous year.

The retirement capital accruing to active insureds contracted from CHF 89.9 million to CHF 85.0 million.

2. Actuarial Performance 2018There were no new risk cases during the reporting year.

3. Interest on Retirement CapitalInterest was paid on individual retirement capital accounts on a monthly basis in line with the performances achieved by the various investment groups. In addition, bonus interest of 0.80% was paid on all investment groups in April 2018. This addi-tional interest was financed by a surplus that was paid by our re-insurer.

4. Investment ClimateThe financial year just ended saw institutional investors report significantly negative returns for the first time since the crisis year of 2008. Punitive tariffs, Brexit, rising interest rates in the USA and uncertainty about the future course of the global economy resulted in greater equity market volatility and unsettled investors. Most asset classes thus closed the year in negative territory.

The international equity markets were put through the mill in the last quarter of 2018, in particular, with an end-of-year sell-off instead of the expected rally. In Switzerland, second-line stocks were hardest hit, losing 17% of their value. Meanwhile, the MSCI World index fell by over 7.5%.

Yields in Switzerland softened again after an interim high in mid-2018, taking those on 10-year Confederation bonds back to -0.2%. By contrast, interest rates in the USA were increased steadily, with the differential between the CHF and USD now at around 3 percentage points.

The spring of 2018 saw the EUR peak for the year against the CHF, at 1.20, after which the exchange rate weakened steadily to 1.12. The USD/CHF exchange rate hovered between 0.90 and 1.00.

5Schindler Foundation | Overview of the 2018 Financial Year |

5. Performance of the Individual Investment Groups

a) Basic Strategy / Performance 2018: -1.46% (2017: +9.53%)At -1.46% (benchmark -5.11%), the basic strategy produced a negative result, but the losses were lower than those of the benchmark and other pension funds in Switzer-land (UBS pension fund barometer -3.45%).

Three investment segments were able to generate a clearly positive performance. Swiss real estate (+4.2% vs. benchmark -5.3%) benefited from the fact that invest-ments were made primarily via investment foundations. At +8.7%, private equity once generated a pleasing result. Infrastructure investments were the best performer (+9.6%), however, as the fund we used profited from the gratifying sale of an oil distribution company in the greater Paris area.

Commodities were the biggest loser, at -27.2%, although with a weighting of just over 1% they represent our smallest investment segment. Swiss and foreign equities each lost around 9% of their value. On the CHF-denominated bond front, a more risky strategy compared with Confederation bonds resulted in our performance lagging behind the benchmark (-1.2% vs. benchmark +0.2%).


Strategy 2018The was adjusted with effect from June 1, 2018, by increasing Swiss real estate by five percentage points at the expense of bonds. Investments in Swiss real estate primarily take the form of relatively low-risk investment foundations.

Basic Strategy Basic Strategy Bandwiths

in % as from 1.6.2018 as per 31.12.2018 as from 1.6.2018

Liquidity 0.0% 2.7% 0–5%

CHF bonds 16.5% 10.0% +/-7.5%

Foreign currency bonds 5.5% 3.4% +/–5.0%

Swiss equities 15.5% 15.7% +/–3.0%

Foreign equities 15.5% 14.7% +/–3.0%

Swiss real estate 22.5% 29.4% +/-7.5%

International real estate 5.0% 3.8% +/–1.5%

Private equity 5.5% 7.3% +/–2.0%

Hedge funds 3.0% 2.1% +/–2.0%

Commodities 2.5% 1.1% +/–2.0%

Insurance-linked securities 2.5% 2.7% +/–2.0%

Infrastructure 3.0% 4.3% +/–2.0%

Alternative bonds 3.0% 2.8% +/–2.0%

100.0% 100.0%

Performance of the Basic Strategy, 2009-2018

In %

12.40 5.52 –1.07 7.94 7.20 8.69 2.60 4.91 9.53 –1.46

17.5

15.0

12.5

10.0

7.5

5.0

2.5

0.0

–2.5

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


b) Equity Pool / Performance 2018: -8.76% (2017: +19.46%)The equity pool generated a performance of -8.76% (benchmark -7.53%).

The overweighting of second-line stocks and the Emerging Markets meant that neither Swiss equities (-10.7% vs. benchmark -8.6%%) nor their foreign counterparts (-8.2% vs. benchmark -7.1%) were able to match their benchmarks’ performance.

Strategy 2018

in % Strategy Bandwidths

Liquidity 0.0% 0.0–5.0%

Swiss equities 30.0% 20.0–40.0%

Foreign equities 70.0% 60.0–80.0%

Performance of the Equity Pool, 2009-2018

In %

23.82 –0.13 –8.28 13.54 22.47 13.22 0.40 6.94 19.46 –8.76

30

25

20

15

10

5

0

–5

–10

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


c) CHF Bonds / Performance 2018: -0.07% (2017: -0.07%)Amid low interest rates, bonds produced a result of -0.07%.

Performance of CHF Bonds, 2009-2018

In %

4.91 3.35 6.52 2.37 –3.00 7.99 1.89 1.23 –0.07 –0.07

9

8

7

6

5

4

3

2

1

0

–1

–2

–3

–4

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

d) Swiss Real Estate / Performance 2018: +4.69% (2017: +4.59%)Once again, monthly results from the CS Investment Foundation were entirely positive. Performance for the year came to +4.69%.

Performance of Swiss Real Estate, 2009-2018

In %

4.73 4.30 5.55 7.04 4.85 5.03 4.79 4.66 4.59 4.69

8

7

6

5

4

3

2

1

0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


e) Hedge Funds / Performance 2018: -4.34% (2017: -0.85%)At -4.34%, hedge funds once again produced a disappointing result. Both of the funds we use closed the year well into negative territory.

Performance of Hedge Funds, 2009-2018

In %

0.05 10.08 –7.32 0.90 6.10 11.67 –0.98 1.11 –0.85 –4.34

12.5

10.0

7.5

5.0

2.5

0.0

–2.5

–5.0

–7.5

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

f) Current AccountInterest of 0.0% was paid on the current account in 2018.

Summary of Overall Performance in 2018

Asset Class Investment Group Schindler Foundation Benchmark

CHF bonds Basic strategy –1.11% 0.20%

CHF bonds –0.07%

Foreign currency bonds Basic strategy 1.39% –1.31%

Swiss equities Basic strategy –9.58% –8.57%

Equity pool –10.72%

Foreign equities Basic strategy –9.30% –7.90%

Equity pool –8.24%

Swiss real estate Basic strategy 4.15% –5.32%

Swiss real estate 4.69%

International real estate Basic strategy –3.99% –3.64%

Private equity Basic strategy 9.52% –13.08%

Hedge funds Basic strategy –1.56% –10.94%

Hedge funds –4.34%

Commodities Basic strategy –27.23% –10.22%

Insurance-linked securities Basic strategy –2.63% 0.07%

Infrastructure Basic strategy 9.65% –3.79%

Alternative bonds Basic strategy 2.78% –1.31%


6. Investment Groups

Breakdown by Investment Group as at December 31, 2018

Investments Number

Investment Group by insureds in % of insureds

Basic strategy 81 458 467 95.8% 270

Current account 460 705 0.5% 4

Bonds 31 935 0.0% 2

Real estate 1 940 367 2.3% 19

Equities 1 011 893 1.2% 24

Hedge funds 98 479 0.1% 9

Total 85 001 846 100.0%

7. Compostion of the Board of TrusteesIn view of his forthcoming retirement in the Spring of 2019, Chairman of the Board of Trustees Heinz Risi stepped down with effect from December 31, 2018. The Board of Trustees would like to thank Heinz for his many years of successful hard work on behalf of the Foundation. The Board of Directors of Schindler Holding has appointed current trustee Günter Schäuble as the new Chairman, and Adrian Boutellier as new trustee and employer representative. As of January 1, 2019, the Board of Trustees will be composed as follows:

Employer representativesGünter Schäuble, Chairman, Corporate Finance & Tax Adrian Boutellier, Corporate Treasury Sabine Schibli, Compensation & Benefits

Employee representativesBernhard Gisler, FO HR & Training Erich Murer, Group Accounting and Reporting

On behalf of the Board of Trustees and the Management

Schindler Foundation

Günter Schäuble Mario Passerini Chairman of the Board of Trustees Managing Director

Ebikon, March 2019

11Schindler Foundation | Balance Sheet |

Balance Sheet

Assets

In CHF 31.12.2018 in % 31.12.2017 in %

Investments 92 566 877.30 100.0 96 886 560.68 100.0

Cash and cash equivalents 5 508 218.86 6.0 5 408 850.38 5.6

Miscellaneous credit balances 2 042 626.09 2.2 1 692 635.65 1.7

Assets with employer 2 393 448.70 2.6 4 309.60 0.0

Total liquid assets 9 944 293.65 10.7 7 105 795.63 7.3

CHF-denominated bonds 7 832 212.18 8.5 9 558 844.73 9.9

Foreign currency bonds 2 676 400.97 2.9 3 187 372.09 3.3

Total par-value investments 10 508 613.15 11.4 12 746 216.82 13.2

Swiss equities 12 969 359.50 14.0 15 124 640.22 15.6

Foreign equities 13 335 637.08 14.4 15 749 774.60 16.3

Total equities 26 304 996.58 28.4 30 874 414.82 31.9

Swiss real estate 26 505 878.00 28.6 25 501 944.47 26.3

International real estate 2 925 382.71 3.2 3 136 853.76 3.2

Real estate investment funds 29 431 260.71 31.8 28 638 798.23 29.5

Private equity 5 681 525.34 6.1 5 423 681.41 5.6

Hedge funds 2 251 382.66 2.4 3 490 490.80 3.6

Commodities 825 316.43 0.9 529 116.06 0.5

Insurance-linked securities 2 078 782.00 2.2 2 135 948.00 2.2

Infrastructure 3 357 201.17 3.6 3 180 904.70 3.3

Alternative bonds 2 183 505.61 2.4 2 761 194.21 2.8

Total alternative investments 16 377 713.21 17.7 17 521 335.18 18.1

Accrued income 0.00 0.0 33 392.97 0.0

Total assets 92 566 877.30 100.0 96 919 953.65 100.0

Liabilities

In CHF 31.12.2018 in % 31.12.2017 in %

Liabilities 3 439 626.25 3.7 2 535 698.65 2.6

Vested benefits 2 720 722.25 2.9 1 821 459.95 1.9

Banks/insurance companies/creditors 718 904.00 0.8 714 238.70 0.7

Accrued liabilities 65 915.12 0.1 19 235.82 0.0

Non-actuarial provisions 120 000.00 0.1 120 000.00 0.1

Retirement capital and actuarial provisions 86 400 708.20 93.3 91 414 864.15 94.3

Retirement capital, active insureds 85 001 845.95 91.8 89 889 103.70 92.7

Cover capital for pensioners 898 862.25 1.0 1 025 760.45 1.1

Actuarial provisions 500 000.00 0.5 500 000.00 0.5

Fluctuation reserves 2 540 627.73 2.7 2 830 155.03 2.9

Foundation capital, disposable assets 0.00 0.0 0.00 0.0

Balance at beginning of period 0.00 0.0 400 234.03 0.4

Reduction in/additions to disposable assets 0.00 0.0 –400 234.03 –0.4

Balance at end of period 0.00 0.0 0.00 0.0

Total liabilities 92 566 877.30 100.0 96 919 953.65 100.0

12 | Schindler Foundation | Operating Account

Operating Account

In CHF 2018 2017

Ordinary and other contributions and deposits 10 328 627.20 9 804 357.65

Employer contributions 7 855 340.20 7 868 294.65

Lump-sum deposits and benefit purchases 2 473 287.00 1 936 063.00

Inflow from contribs and vested benefits brought in A 10 328 627.20 9 804 357.65

Benefits under regulations –10 164 903.15 –5 177 707.70

Survivors’ benefits –136 892.00 –334 752.55

disability benefit 0.00 –145 217.10

Misc. benefits under regulations –191.05 –1 335.85

Lump-sum retirement benefits –10 027 820.10 –2 729 843.50

Lump-sum death and disability benefits 0.00 –1 966 558.70

Withdrawal benefits –1 781 306.70 –11 526 014.15

Vested benefits upon withdrawal –1 709 306.70 –11 250 203.10

Advance withdrawals: home purchase/divorce –72 000.00 –275 811.05

Outflows for be ne fits and advance withdrawals B –11 946 209.85 –16 703 721.85

Additions to/write-back of ret. cap. and act. prov. C 5 014 155.95 –518 326.65

Additions to/write-back of ret. cap., active insureds 4 571 674.45 9 456 769.60

Write-back/addition to cover cap., pensioners 126 898.20 –994 974.55

Interest on savings capital 315 583.30 –8 980 121.70

Income from insurance benefits D 1 114 575.80 2 428 315.55

Insurance benefits 9 993.80 1 479 616.55

Bonus payments on insurance policies 1 104 582.00 948 699.00

Insurance expense E –3 463 886.55 –3 359 378.20

Risk premiums –3 091 317.55 –3 038 711.20

Use of share of surplus –368 194.00 –316 000.00

Contributions to the Guarantee Fund –4 375.00 –4 667.00

Net result from insurance portion F (=A+B+C+D+E) 1 047 262.55 –8 348 753.50

13Schindler Foundation | Operating Account |

In CHF 2018 2017

Net investment income G –1 254 703.99 8 021 428.99

Investment income

Income from liquidity –26 466.20 –153 297.88

Income from CHF bonds –35 078.55 446 541.86

Income from foreign currency bonds 45 580.92 53 729.28

Income from Swiss equities –1 364 400.42 2 814 550.60

Income from foreign equities –1 316 039.24 2 622 507.47

Income from Swiss real estate 1 257 656.53 1 488 999.42

Income from international real estate –99 351.42 223 528.94

Income from private equity 633 524.34 602 535.50

Income from hedge funds 74 628.28 –18 611.08

Income from commodities –131 804.50 98 512.07

Income from insurance-linked securities –31 377.00 –195 916.00

Income from infrastructure 365 294.67 488 967.15

Income from alternative bonds 65 002.84 363 998.33

Portfolio management expense –691 674.24 –779 445.57

Interest on vested benefits (arrears)/miscellaneous –200.00 –35 171.10

Additions to non-actuarial provisions H 0.00 0.00

Other income I 27 781.80 25 667.35

Administrative expense J –109 867.66 –112 644.84

General administrative expense –87 246.06 –88 563.74

Auditors –9 115.45 –10 970.10

Accredited pensions actuary –6 785.10 –5 481.00

Supervisory authority –6 721.05 –7 630.00

Surplus income before additions to/write-back of fluctuation reserve K (=F+G+H+I+J) –289 527.30 –414 302.00

Write back/additions of fluctuation reserve L 289 527.30 14 067.97

Surplus income/expense M (=K+L) 0.00 –400 234.03

14 | Schindler Foundation | Notes

Notes

I Principles and Organization

Legal FormFoundation

Foundation ObjectivesThe purpose of the Foundation is to protect insured employees against the economic consequences of old age and disability, or to protect their surviving dependants in the case of the insured’s early death, in accordance with the Foundation’s regulations and in addition to the benefits provided by existing occupational benefits institutions.

Insured PersonsManagement and executive staff

Registered Under the Occupational Pensions Act (OPA)No

Security FundAffiliated to the Security Fund

DeedApril 11, 1973

Pension Fund RulesJanuary 1, 2012; addendum as at October 1, 2016

Investment RegulationsMay 1, 2017

Regulations Relating to Partial LiquidationJanuary 1, 2007

Regulations on the Creation of ProvisionsDecember 1, 2009

Organizational and Election RegulationsDecember 1, 2012

Rules on the Exercise of Shareholder Voting RightsJanuary 1, 2015

15Schindler Foundation | Notes |

Board of Trustees for 2018–2020

Employer representatives Employee representatives

Heinz Risi, Chairman (until 31.12.2018) * Bernhard Gisler

Günter Schäuble, Chariman as from 1.1.2019 * Erich Murer

Adrian Boutellier, as from 1.1.2019 *

Sabine Schibli * * Joint with a minimum of two signatures

ManagementMario Passerini, Managing Director* Antonietta Despeaux, Dep. Managing Director*

Signing Authority*=Joint with a minimum of two signatures

Accredited Pensions ActuaryToptima AG, Aarau

AuditorsErnst & Young AG, Bern

Supervisory AuthorityZentralschweizer BVG- und Stiftungsaufsicht (ZBSA) (office of occupational pension provision and foundation supervision for central Switzerland), Lucerne

Affiliated Companies

Number Number

of insureds of insureds

Company as per 31.12.2018 as per 31.12.2017

Schindler Elevator Ltd., Ebikon 86 91

Schindler Management Ltd., Ebikon 104 108

Schindler Digital Business, Ebikon 0 21

Schindler IT Services AG, Ebikon 16 0

Schindler Digital Group AG, Ebikon 7 0

Inventio AG, Hergiswil 6 7

Schindler Electronics Ltd., Locarno 0 4

AS Elevators Ltd., Küssnacht 5 6

Schindler Pension Fund, Ebikon 1 1

Executive staff abroad 23 23

Schindler Training Centre 1 1

Schindler Vorsorge Ltd, Ebikon 0 1

Schinach AG, Hergiswil 0 1

Schindler Supply Chain Europe AG, Hergiswil 9 0

Schindler Holding AG, Hergiswil 12 11

Total 270 275


II Active Insured and Pensioners

Active Insured

31.12.2018 31.12.2017 Change

Men 248 255 –7

Women 22 20 2

Total 270 275 –5

2018 2017

Number as at 1.1 275 267

Insureds joining 19 32

Insureds leaving –16 –17

Retirements –8 –5

Cases of death 0 –2

Number as at 31.12 270 275

Pensioners

31.12.2018 31.12.2017 Change

Disability pensions 0 0 0

Surviving spouse’s pensions 1 2 –1

Children’s/orphan’s pensions 0 0 0

Total 1 2 –1

III How the Objective is Fulfilled

Organizational StructureExtra-mandatory and partially independent pension fund

Insured SalaryMonthly salary x 12 plus year-end bonus plus 75% of target bonus, less coordination deduction of CHF 112,320; maximum CHF 687,960

Benefits

Savings Defined contribution

Disability pension 70% of pensionable salary

Life annuity 56% of pensionable salary

Orphan’s pension 7% of pensionable salary

FinancingBenefits under the Rules are financed by the employer.


IV Valuation and Accounting Policies, Consistency

Valuation PoliciesListed securities are carried at their market value as at December 31, 2018, and alternative investments at their last reported values for the year.

Accounting PoliciesThe present annual report has been prepared in accordance with Swiss GAAP ARR 26.

V Actuarial Risks / Risk Cover / Cover Ratio

Actuarial RisksThe actuarial risks are reinsured.

Retirement Assets, Active Insured

In CHF million 31.12.2018 31.12.2017 Change

Retirement assets 85.0 89.9 –4.9

Cover Capital for Pensioners

In CHF million 31.12.2018 31.12.2017 Change

Cover capital 0.9 1.0 –0.1

Changes in Retirement Assets

In CHF 2018 2017

Capital on 1.1 89 889 103 90 075 638

Purchased benefits (AVCs) 2 473 287 1 936 063

Savings contributions 4 764 166 4 829 583

Divorce/home own./lump-sum death ben. –72 000 –1 952 590

Lump-sum payment upon withdrawal –10 027 820 –2 729 844

Vested benefits upon withdrawal –1 709 307 –11 250 203

Interest on retirement assets –315 583 8 980 455

Retirement assets as at 31.12 85 001 846 89 889 103

Interest on Retirement AssetsThe interest paid on individual retirement capital assets depended on the performance of the specific investment groups selected by the insured.


Increase in PensionsSpouses’ and orphans’ pension have not been increased since 2003.

Actuarial ReportThe most recent actuarial report was produced as at December 31, 2016.

Actuarial Provisions

In CHF 2018 2017

Provisions for risk insurance 500 000 500 000

Total provisions 500 000 500 000

This provision is designed to cover those cases in which the risk benefits under the Rules are greater than the benefits that have been reinsured. It currently stands at the minimum level of CHF 0.5 million.

Non-Actuarial Provisions

In CHF 2018 2017

Non-actuarial provisions 120 000 120 000

Total provisions 120 000 120 000

Cover Ratio under Occupational Pensions Ordinance 2 (OPO2)

In percent

31.12.2009 104.36%

31.12.2010 102.97%

31.12.2011 102.84%

31.12.2012 103.30%

31.12.2013 103.47%

31.12.2014 103.40%

31.12.2015 103.56%

31.12.2016 103.58%

31.12.2017 103.09%

31.12.2018 102.94%


VI Notes Pertaining to the Investments and the Net Investment Result

Investment RegulationsMay 1, 2017

Board of TrusteesThe Board of Trustees determines the investment strategy, bandwidths and guidelines pertaining to the individual investment segments.

ManagementThe Management is responsible for managing invested assets in accordance with the Investment Regulations.

BondsInvestments take the form of individual positions and collective vehicles.

EquitiesEquity investments mainly take the form of collective investment schemes.

Investment Vehicles

Manager Name

Hedge funds

FRM ARS I (CHF) / in liquidation

LGT Managed Futures (USD)

MFO Capital MFO Diversified

Private equity

Partners Group PG Global Opportunities

Partners Group Commerzbank P3 certificate

Partners Group PG Direct Equity 2016

Partners Group Pearl Holding

Commodities

FRM FRM Commodity / in liquidation

Insurance-linked securities

LGT LGT ILO Fund (CHF)

Infrastructure investments

LODH Macquarie Infrastructure fund (LMIF)

Alternative bonds

Partners Group European Mezzanine

Partners Group Private Markets Credit Strategies


Real EstateInvestments are effected via investment companies, investment foundations and investment funds.

Investment IncomeNet investment income comprises the following:

In CHF 2018 2017

Investment income

Income from liquidity –26 466 –153 298

Income from CHF bonds –35 079 446 542

Income from foreign currency bonds 45 581 53 729

Income from Swiss equities –1 364 400 2 814 551

Income from foreign equities –1 316 039 2 622 508

Income from Swiss real estate 1 257 657 1 488 999

Income from international real estate –99 351 223 529

Income from private equity 633 524 602 536

Income from hedge funds 74 628 –18 611

Income from commodities –313 805 98 512

Income Insurance linked Securities –31 377 –195 916

Income from infrastructure 365 294 488 967

Income from alternative bonds 65 003 363 998

Portfolio management expense –691 674 –779 446

Interest on vested benefits/withdrawal –200 –35 171

Net investment income –1 436 704 8 021 429


2018 Performance2018 performance (after expenses) was -1.46% for the basic strategy and -8.76% for the equity pool. These calculations were made by the global custodian.

Portfolio Management Expense

In CHF 31.12.2018 31.12.2017

Investments 92 566 877 96 919 953

of which:

cost-transparent investments 89 079 679 94 403 764

non-transparent investments (see overview below) 3 487 198 2 516 189

Percentage of cost-transparent investments 96.2% 97.4%

2018 2017

Portfolio management expense

Portfolio management expense carried directly 53 972 56 799

Indirect portfolio management expense (as per TER) 637 702 722 646

Carrying amount of portfolio management expense 691 674 779 445

as % of cost-transparent investments 0.78% 0.83%

As in 2017, the expense item of CHF 691,674 carried in the 2018 operating account comprises direct costs (custody fees, costs for portfolio managers, stamp duty, etc.) as well as additional TER (Total Expense Ratio) costs for the funds used. TER costs were calculated in accordance with the requirements of the Occupational Pension Supervisory Commission on the basis of holdings at the end of the year, and thus represent only a rough approximation.


Non-Cost-Transparent Collective Investment Schemes

in CHF

Investment vehicle Provider ISIN number 31.12.2018

CMZ/CS 21 CS CH0123871573 0

CS Euroreal CS DE0009805002 116 781

Outperf. Zertifikat Credit Suisse CS CH0344685539 263 451

Tracker Zertifikat Leonteq Leonteq CH0373630224 541 000

9.28% Zertifikat Vontobel Bank Vontobel CH0382899547 376 922

Partners Group Direct Equity 2016 Partners Group n.a. 1 731 825

14.5% Zertifikat Vontobel Bank Vontobel CH0436998196 433 640

FRM Commodity Strategies FRM n.a. 9 855

FRM ARS I FRM n.a. 13 724

Total 3 487 198

Continued investment in non-transparent collective investment schemes is approved as part of the annual investment policy adoption process.

Open Commitments

In CHF million Commitment Value as at

Programme Provider Total Open 31.12.2018 31.12.2017

PG Europ. Mezzanine 2008 Partners Group 1.1 0.1 0.4 0.4

PG Direct Equity 2016 Partners Group 2.3 0.6 1.7 0.7

PG Private Markets Credit Strategies Partners Group 1.6 0.0 1.4 1.8

Fluctuation ReservesThe fluctuation reserves are used to offset price losses on investments. As the insureds have carried all investment risks (except for the risks associated with the current account asset class) since January 1, 2004, the cover ratio bandwidth was fixed at 101.5% to 103.0%. At a cover ratio 102.94% on December 31, 2018, the fluctuation reserves have almost reached their maximum level.

Expansion of Investment Options in Accordance with Art. 50.4 / Art. 55 OPO2Alternative investments (17.7%) exceed the maximum limit of 15% laid down in OPO2. The maximum foreign currency allocation of 30% is also exceeded by 1.8 percentage points.

This is the result of two factors: the investment groups chosen by the insureds, and the broadly diversified international investment strategies determined by the Board of Trustees.


DepositoryCredit Suisse has been appointed as the global custodian (depository).

Financial ControllingThe Board of Trustees receives detailed monthly reports from the Management. Perfor-mance figures are also published on the website every month (www.schindler-pk.ch).

Derivative Financial InvestmentsThe use of derivative financial investments is governed by the Investment Regulations and complies with the requirements of OPO2. With the exception of structured products and forward foreign exchange transactions, no derivatives were used during 2017.

Securities LendingThe Foundation does not engage in securities lending.

Investments in the EmployerNo investments (shares / participation certificates / bonds) were made with employer companies.

The Foundation has an account with Schindler Holding AG that is used to collect contributions. The balance in favour of Schindler Holding on December 31, 2018, stood at CHF 2,393,448.

Credit interest rate with Schindler Holding AG at December 31, 2018: 0.00% p.a.

Pension Fund GovernanceAll of the members of the Board of Trustees, and the Managing Director, are required to confirm in writing once a year that they have complied with both the ASIP Charter and the specific Schindler Code of Conduct. At the same time, they must also disclose any other interests.

RetrocessionsThe Foundation received retrocessions totalling CHF 16,712 from a variety of fund providers during the year just ended. This amount was set off against portfolio management expense.

Exercise of Shareholder Voting RightsOn December 2, 2014, the Board of Trustees adopted Rules on the Exercise of Participation Rights in Companies Limited by Shares, which entered into force on January 1, 2015. The Board of Trustees exercised shareholder voting rights in the interests of the insureds in the case of one investment in individual stocks. The details are published on the website.


VII Notes Pertaining to Other Balance Sheet and Operating Account Items

Non-Actuarial ProvisionsProvisions of CHF 120,000 have been made to finance any costs of medical examinations for insureds that are provided for in the Rules and not otherwise covered.

Share of Surplus from Insurance CompaniesFollowing positive risk performance during the 2016 financial year, the reinsurer paid out a surplus of CHF 0.95 million in 2017. Two-thirds of this was distributed among the insureds in the form of bonus interest on all investment groups, paid in April 2017. The remainder was used to reduce the risk contributions paid by affiliated companies.

VIII Conditions Imposed by the Supervisory AuthorityThe annual financial statements up to the 2017 financial year were approved without any conditions being imposed.

IX Additional Information Regarding the Foundation’s Financial PositionSome securities – up to a maximum of CHF 1.0 million – are pledged to Credit Suisse as collateral for forward foreign exchange transactions.

X Events Following the Balance Sheet DateNone.

25Schindler Foundation | Auditor’s Report |

Ernst & Young Ltd

Schanzenstrasse 4a

P.O. Box

CH-3001 Berne

Phone: +41 58 286 61 11

Fax: +41 58 286 68 18

www.ey.com/ch

To the Foundation Board of

Schindler-Stiftung

Berne, 10 April 2019

Report of the statutory auditor on the financial statements

As statutory auditor, we have audited the accompanying financial statements of Schindler-Stiftung,

which comprise the balance sheet, operating accounts and notes, for the year ended

31 December 2018.

Foundation Board’s responsibility

The Foundation Board is responsible for the preparation of the financial statements in accordance with

the requirements of Swiss law and with the foundation’s deed of formation and the regulations. This

responsibility includes designing, implementing and maintaining an internal control relevant to the

preparation of financial statements that are free from material misstatement, whether due to fraud or

error. The Foundation Board is further responsible for selecting and applying appropriate accounting

policies and making accounting estimates that are reasonable in the circumstances.

Responsibility of the expert in occupational benefits

In addition to the auditor, the Foundation Board appoints an expert in occupational benefits to conduct

the audit. The expert regularly checks whether the occupational benefit scheme can provide assurance

that it can fulfil its obligations and that all statutory insurance-related provisions regarding benefits and

funding comply with the legal requirements. The reserves necessary for underwriting insurance-related

risks should be based on the latest report provided by the expert in occupational benefits in accordance

with article 52e paragraph 1 of the Occupational Pensions Act (OPA) and article 48 of the Occupational

Pensions Ordinance 2 (OPO 2).

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards

require that we plan and perform the audit to obtain reasonable assurance whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the financial statements. The procedures selected depend on the auditor's judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers the internal control relevant to the entity’s

preparation of the financial statements in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s

internal control system. An audit also includes evaluating the appropriateness of the accounting policies

used and the reasonableness of accounting estimates made, as well as evaluating the overall

presentation of the financial statements. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit opinion.

Auditor’s Report

26 | Schindler Foundation | Auditor’s Report

2

Opinion

In our opinion, the financial statements for the year ended 31 December 2018 comply with Swiss law

and with the foundation’s deed of formation and the regulations.

Report on additional legal and other requirements

We confirm that we meet the legal requirements on licensing (article 52b OPA) and independence

(article 34 OPO 2) and that there are no circumstances incompatible with our independence.

Furthermore, we have carried out the audits required by article 52c paragraph 1 OPA and article 35

OPO 2. The Foundation Board is responsible for ensuring that the legal requirements are met and that

the statutory and regulatory provisions on organization, management and investments are applied.

We have assessed whether:

organization and management comply with the legal and regulatory requirements and whether an

internal control exists that is appropriate to the size and complexity of the foundation

funds are invested in accordance with legal and regulatory requirements

measures have been taken to ensure loyalty in fund management and whether the Governing Body

has ensured to a sufficient degree that fund managers fulfill their duties of loyalty and disclosure of

interests

the available funds or discretionary dividends from insurance contracts have been used in

compliance with the legal and regulatory provisions

the legally required information and reports have been given to the supervisory authority

the pension fund’s interests are safeguarded in disclosed transactions with related entities

We confirm that the applicable legal and statutory requirements have been met.

We recommend that the financial statements submitted to you be approved.

Ernst & Young Ltd

Licensed audit expert Licensed audit expert

(Auditor in charge)

Enclosure

Financial statements (balance sheet, operating accounts and notes)

Patrick Schaller(QualifiedSignature)

Raymond Frey(QualifiedSignature)

Contact:Schindler Foundation 6030 Ebikon Tel. +41 41 445 30 11 Fax +41 41 445 30 22 www.schindler-pk.ch

schindler foundation annual report and financial ......land (ubs pension fund barometer -3.45%)....

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